Developing Mobile Application for Land Value Capture Scheme to Finance Urban Rail Transit Projects

Mohammed Ali Berawi, Nyoman Suwartha, Agatha Vania Salim, Gunawan Saroji, Mustika Sari

Research output: Contribution to journalArticlepeer-review

Abstract

Land value capture (LVC) has shown great potential in financing urban rail system infrastructure, such as transit-oriented development (TOD). However, the government of Indonesiahas not tapped this potential in order to close its infrastructure financing gap. This study aims todetermine the incremental rate captured through a tax-based LVC mechanism and develop aproperty market-based mobile application to implement the scheme, with six TOD areas in sevenstations of the Mass Rapid Transit (MRT) Jakarta Phase I project as the case study. This researchused literature and benchmarking studies to collect data, followed by the calculations of thetransport premium, total value increment, and value capture rate for the betterment taximplementation to obtain its research objectives. The results showed that a 5.82% value capturerate could recover 53.8% of the government's initial investment for the project. Based on that figure,betterment tax rates of 0.3% and 0.1% are proposed for residential properties within the radius of100-400 m and 400-700 m from transit stations, respectively. Meanwhile, 2.5% and 2.4% tax ratesare proposed for commercial properties within the radius of 0-300 m and 300-600 m, respectively.Furthermore, the activity workflow for a mobile application in which the government can issue taxinvoices and taxpayers can make payments is also proposed to facilitate the implementation of LVCas an alternative source to finance TOD projects

Original languageEnglish
Pages (from-to)1448-1457
Number of pages10
JournalInternational Journal of Technology
Volume12
Issue number7
DOIs
Publication statusPublished - 2021

Keywords

  • Betterment tax
  • Land value capture
  • Mobile application
  • Transit-oriented development

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